The recent crash in Dubai should not come as a surprise to readers of this column. The idea that if we build the infrastructure,demand will follow is a flawed one. Building of excessive infrastructure can,and more often than not does,lead to the creation of ghost towns. Our otherwise exemplary neighbour,China,too is obsessed with huge infrastructure projects. Every small provincial town is building a large international airport. One hopes that they dont end up being starved of flights.
India,of course,in keeping with our traditions (Vedic,Vedantic,Gandhian,Nehruvian,Composite Cultural,Hindutvic and Vam-Panthic) is quite different. We believe in pathetic,backward,insufficient,over-used creaky infrastructure. It is only in the last few years that we are making a half-hearted and desultory attempt at doing something about our urban requirements. Airports are slowly getting upgraded,metros are being planned and occasionally getting built and so on. Very slow,completely inadequate by global standards and an object of derision to some and shame to others. But is our fumbling tardiness such a bad thing? If we start with the assumption that infrastructure must more or less pay for itself,do we not need to face up to the fact that we are indeed a very poor country and the ability of our citizens to pay for usage is very limited? The overdue (and aesthetically somewhat pleasing) Bandra-Worli sea-link in Mumbai is priced at Rs 50 for a one-way trip for each vehicle and at Rs 75 for a round-trip. In international money that translates to a tad more than a dollar one way and less than two dollars for a return. And guess what,the sea-link is not all that crowded. This means that we do not have too large a base of consumers with an effective monetised demand at a price point which is trivial by international standards. My recent forays on the Mumbai-Pune and the Ahmedabad-Vadodara toll-ways also revealed relatively light usage despite reasonably low toll charges. A sobering situation. But then we are a poor country and we need to bear this in mind when we talk casually about pouring millions and billions into infrastructure and moving fast rather than in our usual stumbling,fumbling style.
Dubai has very few people. But they assumed that it was quite in order to dig islands out of the sea,build cloud-capped towers and gorgeous palaces that are called hotels in contemporary parlance and then sit back for the people to arrive and stay in them. Prosperos dream ended with insubstantial shadows. Dubai has turned into a nightmare for its own residents and the usual tribe of moronic bankers around the world who have recklessly lent money to that small island country and who will doubtless now look for bailouts from their home country tax-payers.
India,on the other hand,has many people. So raw demand for roads,buildings and other paraphernalia is never a problem. But Indians are poor,very poor. Ay,theres the rub. Translating the raw demand into effective paying capability is a challenge and therefore the argument needs to be made emphatically that we should not rush into creating too much infrastructure which cannot be paid for. Ironically,delays and our bumbling approach may actually be helping us. Who ever thought that a little Indic tardiness and inefficiency may have a silver lining! This is not to suggest that Dr Manmohan Singh should not proceed energetically with the construction of our highway system. The wise emperor Sher Shah built roads because he knew that this increased the prosperity of his realm and the welfare of his people. Our prime minister cannot do wrong by imitating his illustrious professional forebear. And Nitish Kumar would do well to remember that the great Sher Shah started his career in Bihar. The people of that state deserve a wise ruler concerned with their welfare after an agonising four and a half centuries of absence,they are hopeful that they finally do have such a ruler.
In the twenty-first century,we know that national prosperity depends more on human capital and on soft infrastructure than on hard buildings. And in the area of education,lets face it,there is plenty of monetised demand in India. The annual revenue of the Kota coaching classes of IIT entrance exams exceeds the combined budgets of all the IITs put together. Clearly upwardly mobile Indian parents are willing and able to pay for good quality education for their sons and daughters. And if we invest today in turning out large numbers of high quality educated persons,then we can assure ourselves of prosperity far more certainly than the Dubais of the world with their glitzy shopping malls and race courses. After a long time,our exalted socialist government seems to have opted for competence in the human resource development ministry. Considering that human capital development has to be our single most important national priority,it remains a mystery as to why previous governments of distinct ideological hues were happy to staff this ministry with shrill voices untouched by visions of modernity or progress. Be that as it may. A good beginning has been made and as the saying goes a task well-begun is considered half-done. Once again after considerable fumbling we seem to have arrived at a sanguine outcome.
Many of my well-meaning NRI friends have over the years held Dubai up to me as a model worth imitating. In their opinion Dubai demonstrated a rare efficiency in contrast to Indias shabby performance. And as the boom continued year on year,the Cassandra-like warnings about an unsustainable bubble were routinely dismissed. I,for one,am quite happy if we stay focused on human beings first and roads and canals as an important but secondary priority. We may yet astonish the world that our fumbling strategy while not ideal has its merits.
jerry.rao@expressindia.com